EPF says only 3% of Malaysians can afford to retire on their EPF savings!

EPF’s chief strategy officer, Nurhisham Hussein’s statement that only 3% of Malaysians can afford to retire on their EPF savings is a wake-up call to the government with regards to the old age financial survival of our working population.

The truth remains that massive EPF withdrawals, on account of the i-sinar, i-lestari and i-citra withdrawals estimated to be about 70 billion ringgit or more, was the main factor to this sad state of affairs.

The financial challenges, brought about by the onslaught of the Covid-19 pandemic would have warranted the government to provide sustained financial assistance to the people. The government, however, deemed it fit to allocate piecemeal financial hand-outs that were grossly inadequate to meet the financial obligations of those who had either lost their jobs or had their income reduced by pay cuts. Whilst defaulting on it’s obligations, moral or otherwise, to provide meaningful financial assistance to the people, the government enticed them to dip into their old age EPF retirement savings to mitigate their financial commitments. Sadly, the folly of the government has now morphed to the reality that about 97% of EPF members will not have the privilege of retiring upon attaining the retirement age of 60.

As said by the EPF’s officer these group of old age people would need to continue working an extra 4 to 6 years. We may see many employees having to work even longer! As our nation is fast moving towards an ageing population the question that needs to be brought up is the consequence of working beyond the retirement age.

A study by the World Health Organisation (WHO) and the International Labour Oraganisation (ILO) has revealed that working long hours is a contributing factor to work related deaths. Working long hours, and by extension working between 4 to 6 years post retirement, would, inevitably, lead to a deterioration of both physical and mental health of the 60+ years old workers in addition to the possibility of death as a consequence therefrom.

Given the reality that the overwhelming number of workers are left with insufficient savings post retirement, we would propose that the government seriously consider an Old Age Social Protection Scheme. On this score we would propose that a nominal % from taxes collected be set aside into a pension fund or, alternatively, be channelled to the EPF whereof an equitable pension payment scheme be devised to provide for retiring workers. Until such proactive measures are put in place at the soonest, we may stand witness to an ageing population who would neither have sufficient EPF savings post retirement nor an Old Age Social Security network to provide them financial sustenance.

K. Veeriah
Malaysian Trade Union Congress, Penang

31 October 2021

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